April 1, 2020
The importance of your Ecommerce Average Order Value

The importance of your Ecommerce Average Order Value

As we discussed, we’re going
to talk about Average Order Value and the importance of that because
it’s very key metric. So, what I thought I’d do is pepper you Ian
with some common questions, I get about Average Order Value and,
but first of all. Let’s dive into why it’s important, why is it so important and the knock on effects. So do you want to cover
a little bit about that? Yeah, yeah, sure. It’s a good way to start as, as a bit of a background because, okay. So, obviously what we, we talk
a lot about growing the eCommerce revenue, and a lot of people talk about conversion rate optimization and what they often forget, is the Average Order Value. And that is so, so important to eCommerce. Revenue growth sometimes, to be honest,
it’s the lowest hanging fruit. So, for example if you can get your
Average Order Value from 60 pounds to 70 pounds, you know, and you put that
into your target dashboard, you know, the framework, you can often
find actually, that may well be, you know, a million pounds. Depending on your numbers, obviously,
but, and it might be super easy to actually get your Average
Order Value higher. I think it’s one of the most exciting
because it’s often the most easiest and it’s the most easiest to get your head
around because there’s only two ways you can get your Average Order Value up. Number 1: is more expensive products. Number 2: it’s more items per order. And so you start to then just think about
that logically for a second that, okay, well, “Can we bring in more expensive
products to our range or can we push people that we’re already buying to
get them to buy a more expensive item?” And the second one is, “Whilst, they are
buying the item they want, can we get them to buy something else or can we double up? Can we make them five,
two or three for two?” And I mean, yeah, the retail, the
High Street had done this for years. I mean, Boots was famous
for their three for two. It’s so, so simple now, isn’t it? You know, you buy three and
you get the cheapest one free. And you know, they launched the
whole, you know, a whole retail, phase of this three for two, you know, and it’s just to get their Average Order Value up. Well, they would have probably tried it in one store and gone “Oh, this is pretty good.” And then they, of course, they roll
it out across everyone. They’re not doing it by mistake and that is because they see the numbers go up, people go in for one item and they
suddenly go “Oh, okay, I’ll get those two things and a couple of more things” and
suddenly their daily takings go up. And, it makes a lot of sense. So, you know, little kind of marketing methods like that can really affect the bottom line.

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